Producer inflation surges to 11-year high of 9.6% for November

WASHINGTON D.C., December 14, 2021 – Today, in the U.S. Bureau of Labor Statistics release of its Producer Price Index (PPI), wholesale inflation rose to an 11-year high of 9.6 percent for the 12 months ended in November. This comes on the heels of last Friday’s announcement by the Bureau of a 6.8% 40-year high for consumer inflation.

In November, the index for final demand services rose 0.7 percent, the eleventh consecutive advance, and prices for final demand goods increased 1.2 percent. The index for final demand less foods, energy, and trade services moved up 0.7 percent in November, the largest rise since climbing 0.8 percent in July.

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Producer inflation. Source: U.S. Bureau of Labor Statistics.

For the 12 months ended in November, prices for final demand less foods, energy, and trade services increased 6.9 percent, the largest advance since 12-month data were first calculated in August 2014.

In November, the index for processed goods for intermediate demand advanced 26.5 percent, the largest 12-month increase since jumping 28.9 percent in December 1974. The index for unprocessed goods for intermediate demand jumped 52.5 percent.

Final demand services

Trade indexes measure changes in margins received by wholesalers and retailers. The indexes for final demand trade services and for final demand transportation and warehousing services also moved higher, rising 0.6 percent and 1.9 percent, respectively.

Product detail

Leading the November increase in the index for final demand services, prices for portfolio management advanced 2.9 percent. The indexes for guestroom rental; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; airline passenger services; and transportation of freight and mail also moved higher.

In contrast, margins for chemicals and allied products wholesaling fell 1.3 percent. The indexes for furnishings wholesaling and for bundled wired telecommunications access services also declined.

Final demand goods

The index for final demand goods rose 1.2 percent in November following a 1.3-percent increase in October. Prices for final demand goods less foods and energy climbed 0.8 percent, the index for final demand energy jumped 2.6 percent, and prices for final demand foods moved up 1.2 percent.

Within final demand goods in November, prices for iron and steel scrap rose 10.7 percent. The indexes for gasoline, fresh fruits and melons, fresh and dry vegetables, industrial chemicals, and jet fuel also moved higher. Conversely, prices for diesel fuel decreased 2.6 percent. The indexes for processed young chickens and for light motor trucks also fell.

Processed goods for intermediate demand

The index for processed goods for intermediate demand advanced 1.5 percent in November after rising 2.4 percent in October. Over half of the November increase can be attributed to prices for processed materials less foods and energy, which moved up 1.2 percent. The index for processed energy goods rose 3.6 percent. In contrast, prices for processed foods and feeds fell 0.2 percent. For the 12 months ended in November, the index for processed goods for intermediate demand advanced 26.5 percent, the largest 12-month increase since jumping 28.9 percent in December 1974.

Unprocessed goods for intermediate demand

The index for unprocessed goods for intermediate demand rose 4.8 percent in November, the eighth consecutive increase. Over 80 percent of the November advance can be traced to prices for unprocessed energy materials, which moved up 8.7 percent. The index for unprocessed nonfood materials less energy increased 4.5 percent. In contrast, prices for unprocessed foodstuffs and feedstuffs fell 0.7 percent. For the 12 months ended in November, the index for unprocessed goods for intermediate demand jumped 52.5 percent.

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Producer intermediate demand inflation. Source: U.S. Bureau of Labor Statistics.

To read the full report click here.

Mario Lotmore

Mario Lotmore is originally from The Bahamas and for the last seven years has called Mukilteo, WA his home. Having lived in every region of the United States has exposed him to various cultures, people, and approaches to life. Lotmore created the Lynnwood Times to represent the character of a diverse and growing Lynnwood. The launching of the city’s community newspaper will only help bring neighborhoods together. Lotmore was an industrial engineer by trade and proven success implementing and managing lean accountable processes and policies within his eighteen years of operations excellence, strategic development, and project management in the aerospace, manufacturing, and banking industries. Over his career he has saved and created hundreds of union and non-union jobs. Lotmore is the President of a Homeowner Association, an active Science Technology Engineering and Mathematics volunteer in his community, and former Boeing 747 Diversity Council leader. Mario’s talent is finding “that recipe” of shared destiny to effectively improve the quality of life for others.

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